State of the Beef Industry

Navigate Market Volatility with Risk Management Strategies

Wed, 22 Oct 2025 18:57:53 GMT

According to Farm Journal’s 2025 State of the Beef survey, risk management tools are being implemented by nearly half of producers. With 43% using Pasture, Rangeland, Forage Insurance (PRF) and 40% using Livestock Risk Protection (LRP) insurance.

Contract-based methods — such as futures, options and forward contracts — remain far less common. The survey shows producers are more likely to use risk tools that are simpler and more accessible, such as insurance, income diversification and off-farm income, instead of the more complex market-based tools.

Dave Weaber, Terrain senior animal protein analyst, says: “Risk management is crucial for producers, including developing comprehensive business plans, understanding cost structures, and using tools like LRP, futures and options.”

He says risk management for beef producers is far more than just a financial strategy — it’s a holistic approach to business sustainability.
Risk management is about protecting equity while maintaining operational flexibility. Weaber challenges producers to think beyond traditional commodity approaches, focusing on strategic decision-making that preserves long-term profitability.

“Set aside $40 to $70 a head for risk management,” he says. “I don’t care how you do it, if you use LRP futures, options [or a] combination of it — whatever it is.”

Weaber challenges producers to rethink their approach, asking the critical question: “How do I get less long? Every cattle producer is long in the market. How does he get less long and leave opportunity for the upside?”

He summarizes risk management isn’t about eliminating all risk but strategically navigating market uncertainties.

He encourages producers to:

Remain adaptable
Continuously educate themselves
Invest in measurement and management tools
Prepare for potential market shifts

By adopting a comprehensive, forward-thinking approach to risk management, beef producers can build more resilient, profitable operations that can navigate market challenges while maintaining financial health.

The State of the Beef Industry Report includes input from nearly 500 beef producers. The annual report provides information to help producers when making decisions. You can download the full report here.

For more insights to the report, as well as producer and economist perspectives, watch the State of the Beef Industry Webinar exclusive on FarmJournal.tv . The panel includes Ken Odde along with Matt Perrier, an Angus seedstock producer from Kansas, and Lance Zimmerman, RaboResearch senior beef industry analyst. You won’t want to miss their thoughts on the beef industry today and in the future.

Your Next Read: 15 Insights on the State of the Beef Industry

80% of Calves Sell Through Livestock Auction Markets

Fri, 17 Oct 2025 15:34:09 GMT

Livestock auction markets remain the option of choice for beef producers.

Nearly 80% of the 2025 Farm Journal State of the Beef Industry survey respondents say they use a livestock auction market as a marketing tool today. Just more than 50% use off farm or private treaty sales and 46% sell at least some beef direct to the consumer.

“Livestock Auction Markets offer quick, easy access with decision-making that doesn’t have to be made until a day or two before you go to sale,” says Ken Odde a commercial cattleman from South Dakota. “In the industry we’ve had a trend towards more video auction sales, but that’s largely a function of herd size. About 80% of the calves that sell in the U.S. sell through livestock auction markets.”

An example of the weaning, health and genetic data displayed on screens while Odde Ranch calves are in the sale ring. The Odde family also develops handouts for potential buyers.

(Odde Ranch)

Odde stresses the importance of transparent, data-driven cattle marketing to add value to cattle. This includes providing buyers with animal weaning and health information along with genetic information.

“Ranchers need to get more active in marketing their calves,” he says.

Odde shares weaning, health and genetic data with his local auction market prior to sale day to share on screens while the calves are in the sale ring. He also develops handouts for potential buyers.

Odde uses the International Genetic Solutions (IGS) Feeder Profit Calculator (FPC) , to generate and provide detailed genetic and management information to buyers.

An example of the International Genetic Solutions (IGS) Feeder Profit Calculator report.

(Courtesy of Odde Ranch)

The FPC is a free, third-party evaluation tool available to help commercial producers, marketers and buyers know and share the profit potential of feeder calves.

According to Odde, these added steps promoting your calves on sale day can add more money to your pocket.

“Feeders are getting more comfortable paying for additional information that reduces their risk,” adds Troy Rowan, University of Tennessee assistant professor.

The Livestock Marketing Association represents more than 80% of all regular-selling livestock markets in the U.S. as well as a growing number of Canadian livestock auctions. Members are a diverse range of professionals in livestock marketing, including livestock auction markets, online and video auctions, livestock dealers, order buyers and sales management.

The State of the Beef Industry Report includes input from nearly 500 beef producers. The annual report provides information to help producers when making decisions. You can download the full report here.

For more insights to the report as well as producer and economist perspectives, watch the State of the Beef Industry Webinar exclusive on FarmJournal.tv . The panel includes Odde along with Matt Perrier, an Angus seedstock producer from Kansas, and Lance Zimmerman, RaboResearch senior beef industry analyst. You won’t want to miss their thoughts on the beef industry today and in the future.

Your Next Read: 15 Insights on the State of the Beef Industry

The Surge of Technology Adoption and Data-Driven Decision-Making

Fri, 10 Oct 2025 11:05:03 GMT

Producers are increasingly embracing new technologies, with adoption of drones, AI systems and genomic tools. The industry is moving toward more data-driven decision-making and precision agriculture practices.

South Dakota cattleman Ken Odde says: “The industry’s future will be defined by technological integration, data-driven decision-making and the ability to adapt to changing economic landscapes.”

He says technology is the most transformative force in the beef industry. He points out emerging technologies like 701X tracking tags will be game changers, allowing ranchers to monitor bull health, movement and breeding activity remotely. These innovations address critical challenges like labor shortages and provide unprecedented insights into herd management.

“We don’t have enough labor, and these technologies fit perfectly into that challenge,” Odde adds.

He predicts artificial intelligence and machine learning will dramatically reshape the industry within the next three to five years.

“This industry has never been a very high-tech kind of industry, but I really think that’s about to shift,” Odde says. “If I can save one bull because of this technological oversight, it easily pays for itself.”

According to the 2025 Farm Journal State of the Beef Industry survey , 66% use at least one tech tool on-farm.

Respondents indicated technology is a challenge to achieving their goals in the next few years.

They also mentioned these challenges related to technology:

Limited access to the latest agricultural technologies can hinder competitiveness
Finding the right technology solutions that align with business goals can be a daunting task
High cost of technology for a small operation

Troy Rowan, University of Tennessee assistant professor, summarizes: “I’m excited about the technologies that we’ve been innovating on over the past decade finally becoming affordable enough for deployment across the industry. Things like genomics have typically been reserved for seedstock breeders, but prices have dropped to a point where there is clear return on investment for commercial operations. Genomics is starting to break through in the commercial heifer replacement arena, but I’m most excited to see how genomics being deployed in feeder calves can add value and increase our industry’s efficiency. Other technologies like virtual fencing, drones and wearable sensors are also approaching price points where wider deployment will come fast.”

The State of the Beef Industry Report includes input from nearly 500 beef producers. The annual report provides information to help producers when making decisions. Click here to download the full report.

For more insights to the report as well as producer and economist perspectives, watch the State of the Beef Industry Webinar exclusive on FarmJournal.tv . The panel includes Ken Odde, a South Dakota cattle producer, along with Matt Perrier, Angus seedstock producer from Kansas, and Lance Zimmerman, RaboResearch senior beef industry analyst. You won’t want to miss their thoughts on the beef industry today and in the future.

Your Next Read: Producer Purchasing Decisions: What Matters Today

Ranching Parched Land: Strategies for Drought Resilience

Wed, 01 Oct 2025 10:32:35 GMT

Drought has reshaped the cattle industry in recent years, but according to the Drovers State of the Beef Industry survey, an increasing proportion of producers are opting to take some type of action to mitigate their risks. While the impact of drought persists for several years, likewise an increasing number of producers who report they reduced their herd size indicate they plan to begin restocking next year.

(Farm Journal)

Despite the high percentage of producers answering they have been impacted by drought, very few operators considered leaving the cattle business because of dry years.

(Farm Journal)

For producers who took action to help mitigate the effects of drought, the most common choices were reducing herd numbers, selling equipment and selling land. One of the other ways producers have mitigated drought effects is through written grazing management plans (GMP) .

Weathering Droughts

LeValley Ranch is a fourth generation cow-calf operation located in western Colorado between Gunnison and Grand Junction — an area where irrigation is dependent on snowpack. Current conditions have reached extreme drought.

Environmental Stewardship Award Program 2024 Region VI Winner LeValley Ranch, Hotchkiss, Colorado

(Baxter Communications Inc. for NCBA/ESAP)

Robbie LeValley, who runs the ranch with her husband and sons, says this is the fourth drought they have weathered since 2000.

“Early on in April and May, when we weren’t getting the late snow and we knew what the reservoirs were measuring at, we made the hard decision to not hay the larger fields and just hay a few of the smaller fields — concentrating on keeping the majority of the fields wet,” LeValley says. “We could keep the grass and the alfalfa alive, but certainly not enough to produce a hay crop as well as graze.”

In normal years, LeValleys take one cutting to concentrate on grazing. They only provide hay from the middle of March to May, this year they had to purchase two-thirds of the hay they typically put up to get them through the winter.

Their grazing timeline changed as well.

“We have a very measured grazing rotation plan in several public land allotments and private leases, which are dependent upon water availability,” LeValley says. “Those ponds have dropped significantly, so we are moving cattle quicker through the rotation — about three to four weeks earlier than normal.”

There will be portions, allotments and whole leases left ungrazed because there is no water there. The cattle drink from natural ponds created by runoff and rain.

Environmental Stewardship Award Program 2024 Region VI Winner LeValley Ranch, Hotchkiss, Colorado

(Baxter Communications Inc. for NCBA/ESAP)

Virtual Fencing Aids During Drought

The LeValleys use virtual fencing in their grazing plan and have expanded areas this year to allow cattle to pick and choose to meet their nutrition needs.

In addition to making grazing adjustments, the family has also culled some of their older females.

LeValley says the grazing plan has been invaluable in being prepared for times of drought.

“The grazing rotation is definitely our insurance policy, and that’s why we’ve had grazing rotation plans in place since 1995,” LeValley says. “We modify it significantly when we have these drought times. But having that additional root mass, even in these drought times, allows for the feed to be relatively good and provides that nutrition the animals need. Having roots to respond when there is moisture is critical for the long-term sustainability moving forward when Mother Nature does decide to provide additional rain.”

Mark and Robbie LeValley

(Baxter Communications Inc. for NCBA/ESAP)

Recognized for Stewardship Efforts

The LeValley family was recognized by the National Cattlemen’s Beef Association (NCBA) as a regional winner of the 2024 Environmental Stewardship Award Program (ESAP).

“The LeValley’s willingness to discuss differing ideas, problem solve complex issues and explore new ideas to improve management have led to positive and lasting rangeland conservation,” says Ken Holsinger, ecologist with the Bureau of Land Management-Uncompahgre Field Office. “The LeValley Ranch is deserving of this award for their proven commitment to the stewardship and conservation of their public land permits and for their cooperative efforts in working with agency partners and other landowners.”

For five generations, the LeValley family has been stewards of the land and they achieve their goals through an overall philosophy of land health and management that concentrates on allowing time to rest, grazing moderately and creating pastures where they are utilized in a different rotation in consecutive years.

“Healthy rangelands are important for the productivity of our ranch, and we wouldn’t be in business if we didn’t care for the land.” explains Mark LeValley. “If you manage the land right everything flourishes, and it is going to be here for the next generation.”

The State of the Beef Industry Report includes input from nearly 500 beef producers. The annual report provides information to help producers when making decisions. Click here to download the full report.

For more insights to the report as well as producer and economist perspectives, watch the State of the Beef Industry Webinar exclusive on FarmJournal.tv . The panel includes Ken Odde, a South Dakota cattle producer, along with Matt Perrier, Angus seedstock producer from Kansas, and Lance Zimmerman, RaboResearch senior beef industry analyst. You won’t want to miss their thoughts on the beef industry today and in the future.

Your Next Read: 15 Insights on the State of the Beef Industry

15 Insights on the State of the Beef Industry

Fri, 19 Sep 2025 19:10:43 GMT

Farm Journal’s recent producer survey results, coupled with expert analysis, point to several dynamics shaping the beef industry in 2025 and beyond. Here’s what four industry insiders have to say about what is driving today’s profitability, how increased market prices are impacting the future and what’s next for beef producers:

Ken Odde, South Dakota commercial cow-calf producer
Matt Perrier, Kansas Angus seedstock producer
Lance Zimmerman, RaboResearch Food & Agribusiness senior beef industry analyst
Scott Varilek, Kooima Kooima Varilek Trading Inc.

Zimmerman on demand: “Demand is as high today as it has been since 1983. The highs in demand were in the late ‘70s. We’re within layup range of getting there, and I never thought that would have been possible 10 years ago.”
Zimmerman on beef quality: “We’re producing 5 lb. of Prime beef today to 1 lb. Select. Go back to 2005, and we were producing 1.2 to 1.3 lb. of Prime and Choice beef for every 1 lb. Select. The consumer loves the quality of beef they’re getting from U.S. beef producers today.”
Zimmerman on the complexity of herd expansion: “ Those operations that are big enough to take that financial risk ... they’re going to want to make sure they can rebuild strategically. The beef industry has always been built by risk takers, but I think as producer demographics have gotten older, as you get older, you tend to take more calculated risk.”
Zimmerman on cow numbers: “I think this is going to be a slower rebuild because of the amount of volatility we’ve seen in the cattle markets over the last 10 years, in addition to how the pricing patterns reacted to the last rebuild.”
Odde on calf prices: “Two years ago, we were selling calves off the ranch for maybe $1,600 to $1,800 a head. Those same calves today are worth $2,200 to $2,400 a head.”
Odde on the beef industry’s impact: “This beef industry today — especially the cow-calf sector — is pumping a lot of dollars into rural America, and this is not something we have seen for a long, long time.”
Odde on young people returning to agriculture: “Making money in these operations is what’s really key to attracting young people back to the operations.
Perrier on bull demand: “As we see fewer cows, we don’t necessarily see less demand for bulls.”
Perrier on how genomics and DNA testing have revolutionized cattle breeding: “For around $50 a head, we are able to take a DNA sample that can tell us an immense amount about that animal’s genetics, both on the commercial and seedstock end of things, allowing for more precise selection and reduced risk.”
Perrier on genetic investment: “It’s more important than ever to make sure you’re investing those profits in things like genetics that can pay back.”
Perrier on consumer demand: “That consumer dollar that comes into the beef industry trickles down all the way through, and that’s where the new source of wealth is in our ranches.”
Perrier on industry outlook: “It’s time as producers to recognize the fact we have a product that people want to buy. We have profitability in the industry, and we need to treat it as a business.”
Varilek on cattle traders’ mindset: “Cattle traders are nervous. We all know the end is going to come eventually, so we kind of fall into that trap.”
Varilek on herd rebuilding: “We’ve had moisture from Texas all the way to North Dakota this year, so we had some grass. We didn’t have the drought issues to worry about. There is some heifer retention that’s happening. I think it’s been a little bit slower, but it is there. Couple that with the cow slaughter being well behind year-ago levels — talking 37% week over week —there’s a lot less cows going to slaughter all year long. We’re trying to keep them. This market has sustained good prices for a long time. We know we’re tight on supplies. We’re trying to rebuild safely.”
Varilek’s three signs for a turning market: “You’ve got the basis, is one. We’re losing some of that. We’re still positive. The bull spreads have not really performed as of late. They have all summer — they’ve been great. But maybe lacking here. And then just the market itself. So, those are the three signs.”

Rebuilding the U.S. Cow Herd: A Calculated Climb

Thu, 18 Sep 2025 14:29:44 GMT

Lance Zimmerman is a senior beef industry analyst with RaboResearch Food & Agribusiness and helped provide research and insights for Drover’s State of the Beef Industry report.

Cow liquidation is in the rearview. Heifer retention is underway. The U.S. cattle cycle is officially shifting into rebuild mode, but this recovery will not be a stampede. It’s shaping up as a slow, strategic climb.

Beef processing bottlenecks, persistent drought, soaring feed costs, labor shortages and post-pandemic friction kept cow-calf margins relatively tight from 2016 to 2022. Some of those pressures have eased, but with herd numbers set to grow, others could easily resurface. As producers hold back more heifer calves this fall, herd replenishment remains a cautious and calculated exercise.

Rabobank expects the Jan. 1, 2026, beef cow inventory to be 28 million head, up 200,000 head from the prior year. A second increase of less than 500,000 head is likely over the following year. In short, do not expect dramatic shifts early in this rebuilding effort. From 2024 to 2026, the nation’s beef cow herd will hold relatively steady (see Figure 1).

Figure 1: U.S. beef cow inventory on January 1

(USDA, Rabobank 2026-2030 forecast)

More meaningful herd growth is forecast from Jan. 1, 2027, into the early 2030s. But even then, the peak inventory projection is likely to be 500,000 to 1 million head below the 2019 highs, and that is not necessarily a bad thing.

Thanks to long-term efficiency gains across the U.S. beef sector, a rebuild topping 30.5 million cows might be more than enough to hit new record high in total production. Per capita beef supplies could reach levels not seen in more than two decades. Still, adding upward of 2.5 million cows during this next phase will be complicated.

According to the latest Farm Journal State of the Beef Industry survey , just 47% of producers are considering expanding their cow herd within the next five years, a four-point drop from last year’s already modest number.

Factors Affecting Herd Building

The hesitation is rooted in hard realities. Rising input costs, from fencing and equipment to replacement heifers, are straining budgets. And it is not just the higher price tags. Volatility is adding pressure. Fluctuating expenses are muddying financial planning, tightening cash flow, and making profit targets feel increasingly out of reach.

Access to pastureland is still a sore spot. Prices keep climbing, while land-use restrictions and expanding suburbs are blocking opportunities for cattle producers.

Federal government shifts are not helping morale either. Regulatory red tape and compliance demands already pull significant time and resources. Adding the moving target of trade policy and a maze of new rules, and producers find themselves burning hours to stay current. The burden is exhausting.

Behind much of the fatigue in cattle production lies a familiar challenge: aging producers and a shrinking labor pool. Finding help is tough and getting tougher.

Older ranchers worry about health, longevity and who will take the reins next. Meanwhile, the next generation faces a different battle: securing capital, gaining know-how and finding tenacity that defined those who came before. The grit is there — so are the obstacles.

Given these constraints, can the beef cow inventory forecast outlined earlier really take shape in the coming years? Improving drought conditions and profitability help. Survey responses suggest it will take even more than that.

USDA’s latest Census of Agriculture reveals a clear trend: big cow-calf operations are getting bigger. Since 2012, producers with 200 head or more added 2.2 million cows, a 20% jump. Meanwhile, operations less than 200 head lost 2 million, an 11% drop. The shift was established by 2017 and accelerated into 2022.

Rabobank sees the 2027 census amplifying the trend: big operations getting even bigger. They have the capital cushion to absorb risk and make bold moves without jeopardizing the ranch. That is critical when bred cow and heifer prices push past $4,000 per head in the next few years and calf prices soften as supply grows later in the cattle cycle.

Producer age matters even more in this rebuilding effort. According to the 2022 Census of Agriculture, beef cattle operators now average 58.3 years old, the oldest among all U.S. livestock and poultry producer groups.

Younger ranchers might be more willing to bet bigger during this rebuild. For many families, it’s a natural handoff, an exit lane for older operators to transition decision-making to the next generation. Also, herd expansion could unlock new revenue and pull sons and daughters back into the ranch.

Cow-calf producers stand apart in the beef supply chain as fixed-cost operators in a largely margin-driven sector, but that distinction is blurring.

As herd size grows larger and ranch leadership skews younger, margin thinking will gain ground. Larger producers focus on profit per cow or per acre. Younger ranchers lean into data and strategy.

With volatile market prices and uncertainty surrounding the cattle business, margin-minded cow-calf operators are not just likely to evolve during this cow herd rebuild. They are essential to the U.S. restocking effort.

The State of the Beef Industry Report includes input from nearly 500 beef producers. The annual report provides information to help producers when making decisions. Click here to download the full report.

For more insights to the report as well as producer and economist perspectives, watch the State of the Beef Industry Webinar exclusive on FarmJournal.tv . The panel includes Ken Odde, a South Dakota cattle producer, along with Matt Perrier, Angus seedstock producer from Kansas, and Lance Zimmerman, RaboResearch senior beef industry analyst. You won’t want to miss their thoughts on the beef industry today and in the future.

Your Next Read: Consumer Craze for Protein Drives Beef Demand

— Lance Zimmerman serves as RaboResearch Food & Agribusiness’ senior beef industry analyst. Discovering and implementing decision-friendly business solutions for agricultural and food companies has been the focus of his career. Growing up on a western Kansas farming operation that includes a commercial cow-calf herd has fueled his passion for the industry.

Consumer Craze for Protein Drives Beef Demand

Wed, 17 Sep 2025 15:10:17 GMT

The industry has made substantial progress in beef quality, with strong consumer demand supporting premium pricing. Quality grade improvements and consistency have been major success stories.

U.S. Bureau of Labor Statistics shows the average retail price of ground beef rose to a record $6.32 per pound in August 2025.

This is up from $6.25 in July and $5.74 in August 2024. Prices for certain beef cuts might ease with the end of peak grilling season, but ground beef prices remain historically high.

Don Close, Terrain senior animal protein analyst, says: “What we have seen so far is consumers have been incredibly loyal to protein collectively, but they have been especially loyal to beef. Beef is actually continuing to gain market there — even at the current prices — at the expense of the other protein.”

Close says when he correlates the monthly all fresh beef price to hourly wages, he found they are in lock step.

“Yes, beef prices have escalated, but beef prices have not risen any faster than the improvement in overall hourly wage,” he explains. “So, from the consumer’s perspective, their share of their paycheck committed to beef is essentially the same as it’s been on a comparative basis for years.”

Other contributing factors to beef demand include consumers’ craze for protein and the impact of GLP-1 diets on protein consumption.

According to Dave Weaber, Terrain senior animal protein analyst, beef spending has dramatically increased since COVID-19 —outpacing pork and poultry combined. Weaber says consumers are now spending about $84 more per capita annually on beef compared to the 2005-2015 period.

He attributes this growth to several factors:

Improved beef quality: The industry has seen a substantial increase in Prime and Choice beef, with nearly 85% of heifers and 75% of steers now grading in these top categories.
Changing consumer preferences: Younger generations are spending more on high-quality beef, both in restaurants and at home, driven by increased cooking skills and appreciation for beef’s flavor and quality.
Health perception: Beef is now viewed more positively as a health product, with increased transparency and better communication from the industry.

Close says the role of strong demand can’t be ignored and is likely to continue.

“I think it’s certainly through 2026 and, really more realistically, somewhere deep into 2027,” he summarizes.

The State of the Beef Industry Report includes input from nearly 500 beef producers. The annual report provides information to help producers when making decisions. Click here to download the full report.

For more insights to the report as well as producer and economist perspectives, watch the State of the Beef Industry Webinar exclusive on FarmJournal.tv . The panel includes Odde along with Matt Perrier, Angus seedstock producer from Kansas, and Lance Zimmerman, RaboResearch senior beef industry analyst. You won’t want to miss their thoughts on the beef industry today and in the future.

Your next read: 6 Challenges Facing the Beef Industry Today

6 Challenges Facing the Beef Industry Today

Tue, 16 Sep 2025 17:58:26 GMT

While optimistic, commercial cow-calf producer Ken Odde says he is aware of potential industry threats that can impact growth of the nation’s cow herd as well as beef supply and consumer demand. However, he says the industry’s adaptability will help mitigate these challenges.

Some of the key concerns, summarized by the 2025 Farm Journal State of the Beef Industry survey and industry leaders include:

Animal Health.
“The industry has existential threats that could grind our current hot streak to a halt,” says Troy Rowan, University of Tennessee assistant professor. “ New World screwworm or other emerging animal diseases could put the industry on its head overnight.”
Land.
Rowan says in many parts of the country, agricultural land loss is shifting productive ranching areas out of production.
“This will challenge producers to continue to be profitable with smaller land footprints,” he summarizes.
Aging and Succession Planning.
A critical challenge facing the industry is the aging producer population. Many older producers are choosing to reduce cow-calf operations, opting instead for stocker cattle or leasing land for alternative uses. This generational shift poses a significant threat to herd expansion and long-term industry sustainability.
Trade and Tariffs.
Dave Weaber, Terrain senior animal protein analyst, says trade dynamics add complexity to an already challenging beef market environment. He points out the 50% tariff on Brazilian beef has significant market implications as related to lean trim.
Labor and Immigration.
Immigration reform is becoming a critical issue for the industry, with labor shortages and workforce challenges affecting production capabilities.

“Immigration reform is an important step in helping to fill jobs and establish a sustainable workforce for the industry,” says Jarrod Gillig, Cargill senior vice president, managing director for beef.
Feeders and Packers Capacity.
The current market presents significant challenges for packers, Gillig admits. As of early August, packer margins are estimated at negative $300 per head. Packers are relying on diversified portfolios to help buffer against beef market volatility.

But the question is: How long is that sustainable?

“With supply fundamentals remaining on the current path of further tightening cattle numbers for at least the next three years, the industry’s negative margin situation is not likely to change given the over-capacity situation,” says John Nalivka, Sterling Marketing Inc. president. “Consequently, capacity will be reduced. I believe this will occur through permanent plant closures.”

Packers are not the only sector with over-capacity, he adds. Feedlots are facing the same dilemma as feeder numbers continue to tighten.

The State of the Beef Industry Report includes input from nearly 500 beef producers. The annual report provides information to help producers when making decisions. Click here to download the full report.

For more insights to the report as well as producer and economist perspectives, watch the State of the Beef Industry Webinar exclusive on FarmJournal.tv . The panel includes Odde along with Matt Perrier, Angus seedstock producer from Kansas, and Lance Zimmerman, RaboResearch senior beef industry analyst. You won’t want to miss their thoughts on the beef industry today and in the future.

Your Next Read: 47% of Beef Producers Plan to Increase Herd Numbers